Market participants invest billions of dollars each year in debt, secured and unsecured. The credit support for the debt would be illusory without carefully crafted covenants that prevent the company from selling or transferring its assets outside the reach of creditors. Reliance on these covenants is critical for investors.
The Bottom Line
A mortgage bank has the power to foreclose and sell the collateral if the debtor is in default. However, this power does not apply in full. There is a risk of abuse of power in this respect. The circumstances, motives and actions of the parties play a major role in this. In this situation, the interests of the mortgage bank and the debtor are diametrically opposed. The mortgage bank has an interest in claiming the outstanding claim and the debtor has an interest in maintaining his immovable property.
The Bottom Line:
As from 1 May 2018, a comprehensive reform of the Belgian insolvency framework entered into force. The old framework consisted of two separate laws governing respectively bankruptcy and judicial reorganization. The new legal framework incorporates both regimes in Book XX of the Belgian Code of Economic Law.
Innovations
Municipal restructurings pose many challenges distinct from those encountered in a typical corporate bankruptcy. One challenge frequently encountered in the context of a municipal restructuring is how to restructure municipal bonds insured by a monoline insurance company.
Introduction
The Bottom Line
In the August 2017 issue of Debt Dialogue, we discussed the recent decision by Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York with respect to claims brought by the litigation trust (the Trust) established in the bankruptcy case of LyondellBasell Industries AF S.C.A. (LBI) against Access Industries, Inc.